Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Overview of social protection Laura Rawlings, World Bank Pensions Social Safety Nets Core Course April 2016 1 d
Outline 2 What is social protection? Social protection systems Policy, program and delivery Goals Who we are - what we do at the World Bank
Outline 3 What is social protection? Social protection systems Policy, program and delivery Goals Who we are - what we do at the World Bank
What is social protection? 1.2bn People in extreme poverty below $1.25/day 75 m. Unemployed youth Social protection is about how we take care of ourselves and each other to manage risk 2 x Number of elderly (over 60) in 2050 (compared to 2010) 674 Average number of natural disasters
CLICKER QUESTION Which definition best fits your understanding of social protection? A. The set of public measures that a society provides for its members to protect them against economic and social distress that would be caused by the absence or a substantial reduction of income from work as a result of various contingencies (sickness, maternity, employment injury, unemployment, invalidity, old age, and death of the breadwinner); the provision of health care; and, the provision of benefits for families with children. B. A set of public actions which address not only income poverty and economic shocks, but also social vulnerability, thus taking into account the interrelationship between exclusion and poverty. C. Social protection and labor market regulation that reduce the risk of becoming poor, assist those who are poor to better manage further risks, and ensure a minimal level of welfare to all people. D. Public actions carried out by the state or privately that: a) enable people to deal more effectively with risk and their vulnerability to crises and changes in circumstances (such as unemployment or old age); and b) help tackle extreme 5 and chronic poverty.
Perspectives on the Role of SP 6 Risk Growth (i) to enhance individual and social welfare (ii) to contribute to economic development, growth (iii) to achieve effective, sustainable poverty reduction Rationale: public interventions needed to address market failures, esp. insurance markets; asymmetric information Discipline: Economics Examples: Social Risk Management Framework, Insurance Theory Rights Needs (i) to fulfill natural or legally mandated basic social and economic rights Rationale: obligations of the state to enforce citizens rights Discipline: Law, Ethics Examples: Social Protection Floor Initiative, Human Development Index
World Bank definition Social protection and labor systems, policies, and programs help individuals and societies manage risk and volatility and protect them from poverty and destitution through instruments that improve.. Resilience for the vulnerable Insuring against impacts of different shocks Equity for the poor Opportunity for all Promoting human capital and access to productive work Protecting against dire poverty and loss of human capital 7
Evidence shows that social protection and labor policies contribute to sustainable, inclusive growth National level - Promotes social cohesion, enables reform - Stimulates aggregate demand Community level - Creates productive assets - Improves functioning of labor markets - Creates local spillovers from increased demand Household level - Fosters accumulation of assets - Increases entrepreneurial activity - Increases/preserves human capital Source: Alderman and Yemtsov (2012)
Global Revolution in Social Assistance 9 2000: 72 developing countries with SSN 2013: 98 developing countries with at scale SSN
Rights and dignity Access to Basic Services Social Insurance: RISK POOLING Social Assistance: non-contributory TRANSFERS Labor Market regulations Labor Market Programs
Social protection over the lifecycle Pregnancy/ early childhood Childhood Youth Work -ing age Old age Opportunity/ Promotion Nutrition, ECD, Cash transfers linked to pre-school/ health Cash transfers for (girls ) education Youth employment programs, skills Employment services, entrepreneurship, skills Productive aging Equity/ Protection Orphans vulnerable child programs, child allowances Child allowance, school feeding Public works Cash & in-kind transfers, public works Social pensions Resilience/ Prevention Maternity allowances School feeding Micro insurance schemes Unemployment, disability insurance Old-age pensions, disability insurance 11
Old Age Pension - Design typology Objective Voluntary savings to smooth consumption Mandatory savings to smooth consumption Mandatory co-insurance against consumption shocks Elderly poverty protection Protection against poverty & consumption shocks Voluntary Pension Savings Mandatory Pension Savings Mandatory Pension Insurance Elderly Social Assistance Other Assistance Programs Instrument Third pillar - Voluntary occupational & individual pension arrangements Second pillar Mandatory contributory earnings-related pension savings First pillar Mandatory contributory earnings related pension insurance Zero pillar Non-contributory elderly social assistance Fourth pillar - other assistance programs (eg. health or housing) assisting elderly income protection
CLICKER QUESTION At what stage of the lifecycle are needs concentrated in your country? A. Early childhood B. Childhood C. Youth D. Working age E. Old age 13
Outline 14 What is social protection? Social protection systems Policy, program and delivery Goals Who we are - what we do at the World Bank
Social protection systems Program Policy Level: Aim: Ensuring overall policy, fiscal coherence across programs and levels of government relative to needs Program level: Program Admin. subsystems Program Aim: Improving design of existing programs and harmonizing across portfolio of programs Program Service Delivery level: Aim: Building basic subsystems to support one or more programs Source: Robalino, Rawlings and Walker (2012)
Policy level
How much countries spend on social protection, health and education depends on revenue mobilization 35 %GDP 30 Social Protection Health Education Indirect taxes Income taxes Corporate Property taxes 25 20 15 10 5 0 Emerging Europe LAC Asia and Pacific Sub-Saharan Africa MENA Source: IMF 2015
Burkina Faso Zambia Benin Mozambique Senegal Ecuador Togo Ghana Guatemala Bangladesh Vietnam Pakistan El Salvador Morocco Tajikistan South Africa Peru Chile Armenia Azerbaijan Mexico Bolivia Colombia Costa Rica Nepal Korea Belarus Turkey Argentina Bulgaria Uruguay Moldova Croatia Brazil Social insurance is the largest social protection spending in most countries 18 Social Protection spending by pillars, % of GDP, 2010-2012 16 14 %GDP 12 10 8 6 4 2 0 Social Insurance Labor market Social Assistance
Case of Turkey. Turkey, 2014 Percent of general government spending Social Protection Spending Social Assistance 4% Social Insurance 29% Labor Market Programs - 1% Expenditure on general public services Expenditure on public order & safety Expenditure on environment protection Expenditure on health Expenditure on education SI Expenditure on defense Expenditure on economic affairs Expenditure on housing & community amenities Expenditure on recreation, culture, & religion SSN to total LM Source: IMF (2015) and ASPIRE
GENEROSITY GENEROSITY The typical social protection landscape. Social Insurance Civil Servants Security Forces SOEs Private Sector Social Pensions LOW INCOME BENEFICIARIES HIGH INCOME Social Assistance Food subsidies Fuel subsidies Cash transfers Public works Universal child benefits LOW INCOME BENEFICIARIES HIGH INCOME
CLICKER QUESTION Is the typical social protection landscape true of your country? A. Yes B. Similar, but not exactly C. Some key differences D. Not at all 21
Program level
Core social protection PROGRAMS Social Insurance Social Assistance Labor Old Age Pensions Disability Unemployment Maternity Health Cash Transfers (conditional, public works, unconditional) In-kind Transfers (school feeding, fertilizer, seeds) Fee waivers, tax incentives Subsidies Active Labor Market Programs Regulations Informal savings pooling Social Services
Typical program mix Social Assistance Targeted service delivery Pensions Other Insurance Labor Programs Middle income countries National, proxymeans tested social transfer systems Support marginalized groups to access quality services Expand multipillar pension system Expand formal disability & accident insurance Employment services; job search assistance; labor regulation Low income countries Regular seasonal public works; cash transfers to select groups Targeted support to increase access to quality services for the poor Reform contributory schemes; Promote savings for informal sector Index-based agricultural insurance; Targeted support to extend health insurance poor Skills development, especially for informal sector Fragile states Cash & In-kind safety nets through NGOs or communitybased organizations Rebuilding basic infrastructure and services Social pensions through communitybased initiatives Community- Based Health Insurance Temporary job (pubic works), demobilization & reintegration 24
Why do we need systems? Bangladesh: Fragmentation.. 25
leads to coverage gaps 26
Delivery level
Delivery Chain: Most social programs pass through similar implementation phases or business processes Business Processes for Determining Eligibility (Population = all clients / potential beneficiaries) Business Processes for Program Delivery (Population = beneficiaries) Outreach Consider Intake & Registration Personal Identification Information (ID) Assessment of needs & conditions Enrolment Decision & Notification Decide Determine Benefits & Service Package Implement Service Transaction & Payments Program Case Management Socio-Economic Information Other Information on needs & conditions Govern Grievance Redress Oversight & Controls Monitoring of Processes & Outcomes
Outline 29 What is social protection? Social protection systems Policy, program and delivery Goals Who we are - what we do at the World Bank
Key challenges. Social Insurance (SI) coverage is low and reaches mostly formal sector workers SI systems are fragmented and inequitable Subsidy systems are non-transparent, often regressive and distort incentives to work and save Social assistance tends to have low impact due to small benefits and weak links to human capital development Active labor market programs are underdeveloped, especially for the most vulnerable workers ( Ribe, Robalino and Walker)
THE WORLD BANK S SOCIAL THE PROTECTION WORLD BANK S AND LABOR STRATEGY 2012-2022 SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022
THE WORLD BANK S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From fragmented approaches to harmonized systems Cash transfers in Sub-Saharan Africa are fragmented across ministries and donors Outside government 45% Other 11% Social welfare 35% Social security/ labor, 9% Fragmentation: Different ministries/donors implement similar programs Some beneficiaries have access to multiple programs, others excluded Limited coordination between social insurance, assistance and labor Meeting the harmonization challenge: Address incentive incompatibility Adequate, appropriate financing Clarify institutional roles Use delivery sub-systems as entry points 32 Source: Garcia and Moore (2012)
THE WORLD BANK S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 Percent From exclusion to inclusion Low coverage concentrated among: low-income countries and fragile contexts poor populations and vulnerable groups, including women informal sector No transfer Only social assistance 13 13 23 12 17 9 75 70 65 Only social insurance Labor market programs 27 33 46 21 22 43 33 Meeting the coverage challenge Sustainability -- fiscally and institutionally Adequacy appropriate levels of support, inclusive SS Africa MENA SAR LAC EAP ECA 46 % of households receiving transfers 32 Source: World Bank ASPIRE database 22
THE WORLD BANK S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From less productive Low productivity concentrated Low-income countries and fragile contexts Poor populations and vulnerable groups Informal, rural sectors to more productive Moving beyond the formal sector the world of work is not a world of wage earners Middle East and North Africa East Asia and the Pacific selfemploye d 27% wage 47% selfemploye d 23% wage 43% Meeting the productivity challenge Investment in human capital, especially among children Improve access to basic services in education, health and nutrition Improving productivity and access to jobs Improve labor market functioning to enable access to higher productivity work Foster activation programs, skills, 34 capacity building farmers 26% South Asia selfemploye d 21% farmers 29% wage 50% Source: WDR 2013 Calculations farmers 34% Sub-Saharan Africa selfemploye d 33% farmers 48% wage 19%
THE WORLD BANK S SOCIAL PROTECTION AND LABOR STRATEGY 2012-2022 From inflexibility to responsiveness The need for effective risk management 35 Against both individual shocks and systemic crises Crises are increasingly frequent, widespread, severe and concentrated in poor regions among poor people Meeting the responsiveness challenge Ensure that appropriate programs are in place before shocks hit Enhance existing programs to capture the newly vulnerable Add programs to the social protection and labor portfolio that can be scaled up during crises Strengthen programs to help the most vulnerable in times of crisis 446 Average number of disasters 1991-95 674 Average number of disasters 2006-10
CLICKER QUESTION What is the main challenge that you see in SP? A. Fragmentation across programs B. Coverage of poor, vulnerable C. Productivity and links to labor markets, human capital investments D. Responsiveness to crises 36
Outline 37 What is social protection? Social protection systems Policy, program and delivery Goals Who we are - what we do at the World Bank
World Bank Mission Twin Goals: Eradicate extreme poverty Boost shared prosperity
Where We Work
The World Bank s Role in 41 Development A Development Finance Institution: The largest provider of development assistance(over$50 billion per year since 2008 crisis) A Global Partner: Work primarily with Governments, but also NGOs, Private Sector, Bilaterals, Multilaterals A Knowledge Bank: Provides technical assistance from its global knowledge and diverse pool of skills * IBRD, IDA and IFC new commitments; IDA new commitments is about $15 annually
Bank Lending by Theme Social Protection 12% Social development/gender Trade & integration 2% 5% Human development 9% Urban development 9% Public sector governement 10% Economic management 1% Rural development 12% Environment & natural resources 24% Financial & private sector dev 16% 42
Social Protection in the World Bank On average, in the last 3 years, 114 million people benefited from World Bank supported Social Protection projects The World Bank currently works with 88 countries on Social Protection and Labor issues Investment and policy advice 31 new countries (22 of them IDA) since 2009 43
THANK YOU!!! For more information: http://www.worldbank.org/en/topic/socialpr otectionlabor